Meeting demand

Dallas-Fort Worth nails ranking as second busiest home construction market in U.S.

DFW nails ranking as second busiest home construction market in U.S.

Wildflower Ranch lazy river
A new neighborhood of affordable single-family homes called Wildflower Ranch is being built in far north Fort Worth. Rendering by Cody John Studios

New single-family homes are popping up like mushrooms around Dallas-Fort Worth, with the region nailing down its status as one of the busiest home construction markets in the country.

Data from the National Association of Home Builders shows DFW issued 43,884 construction permits for single-family homes in 2020. That puts DFW at No. 2 among U.S. metro areas for single-family construction permits handed out last year.

Only the Houston area ranked higher, with 48,208 permits for construction of single-family homes. The Austin area ranked fifth (21,653 permits).

Despite last year’s flood of single-family construction permits, homebuilders in Texas are having trouble keeping up with “the phenomenal demand,” says Ben Caballero, founder and CEO of Dallas-based HomesUSA.com.

The Texas Real Estate Research Center says that across the state, the number of single-family homes that began construction in 2020 grew 18.9 percent compared with 2019. DFW saw its single-family home starts skyrocket 21 percent last year compared with 2019, with the Houston area close behind at 20.2 percent.

Although last year’s new-home construction pace was slower last year in Austin than in DFW and Houston, the Austin area led the state’s major metros on a per-capita basis with more than 21,300 single-family homes getting underway.

Low mortgage rates and robust population growth boosted housing demand across the state last year, the center says. And this year, demographic trends like the aging millennial population and out-of-state migration will continue to propel housing demand, the center says.

Statewide, the number of single-family home permits is expected to rise about 15 percent this year versus 2020, Luis Torres, research economist at the Texas Real Estate Research Center, says in a release.

“Homebuilders are trying to satisfy demand in the lower price [categories] by building homes in the suburbs or outer city borders where land costs are lower,” Torres says. “This trend was prevalent before the pandemic but has become even more widely adopted over the past year.”

Torres predicts an 8.4 percent jump this year in single-family home sales around the state.

In January, Austin ranked second among 20 major U.S. markets tracked by housing data provider Zonda for the year-over-year increase in pending sales of new homes (42.3 percent). Only Jacksonville, Florida, ranked higher (45.8 percent). Dallas landed at No. 6 (34.9 percent) and Houston at No. 11 (21.4 percent).

“The housing market is incredibly hot today in virtually every metro across the country. Builders are eagerly out shopping for land to better match supply with demand,” says Ali Wolf, Zonda’s chief economist.

Zonda data shows that in January, Dallas-Fort Worth was the state’s most undersupplied market in terms of lots available for new homes, with Austin and Houston not that far behind. DFW, Austin, and Houston all fell into the “significantly undersupplied” category for vacant home lots.

That lack of supply hasn’t stopped homebuilders from marching ahead with construction. For instance:

  • A 1,100-acre neighborhood of affordable single-family homes called Wildflower Ranch, near the Texas Motor Speedway in far north Fort Worth.
  • The 95-acre Chalk Hill master-planned community in the DFW suburb of Celina will offer 440 single-family homes.
  • The first phase of the 454-acre, mixed-use Parmer Ranch project is getting underway in the Austin suburb of Georgetown. That phase will feature 155 single-family homes. The project eventually will contain 1,000 single-family homes.
  • The 564-acre, master-planned Beacon Hill community ultimately will bring roughly 1,000 single-family homes to the Houston suburb of Waller.